Biotech company's drug is applicable to all 15 solid tumor cancer with a vaccine manufactured from your own cells.
DEDUCED RECKONING: Northwest Bio, the perfect stocking stuffer
Joan Lappin, Sarasota Herald-Tribune 2 hours ago
When I first started writing here about Advanced Micro Devices at $11, the leading analysts on Wall Street were detractors, and one predicted the stock was going to $6. It never did and is now in the $90s. AMD had major risks then. Now, everyone loves it, so it is no longer a bargain.
In October, when I drew your attention to NWBO, like AMD years before, I wrote that it was not without many detractors or risks. Any biotech company, or any government regulated entity in any field, can always suffer at the hands of those regulators. For that reason, I wrote that this was a tiny company with limited staff and money and therefore a risky investment until we knew the trial had succeeded.
The most important fourth-quarter event for NWBio’s path to drug approval was the unblinding of its 15-year trial for DCVAX-L. On Oct. 5, the company issued a press release outlining the many steps that would ensue including the “unblinding” of the company’s management to the results of the statistical analysis of the data. The independent statisticians completed their analysis, and I am fairly certain based on public events that the company now has been unblinded to the data. HOWEVER, and this is a huge however, if the trial had failed, SEC rules require that they had to reveal that to investors within four days. Instead, weeks have passed without a word, so by inference we now know the trial was a success. This is the largest and longest such trial ever run and the only one of more than 400 to reach a happy result. The lead investigators and their collaborators are hard at work on a paper to be published in a major medical journal. Until then, the company is in a “quiet period.”
While COVID-19 slowed the company’s ability to get information from hospitals and doctors to complete the lockdown of its data, it also helped in a very major way. While many believe the Trump administration badly mishandled the pandemic in the United States, Trump did initiate Project Warp Speed to accelerate a vaccine and to speed drug approvals in the future. Trump recognized that the FDA, just like its UK counterparts MHRA and NICE, were slow, plodding mechanisms that caused drugs to take forever to be approved.
Long before COVID-19, the UK set up a mechanism to identify very promising drugs for unmet needs like that of patients who contract glioblastoma. NWBO was one of three such drugs given this fast-track treatment in 2014. Six years later it seems a joke, but once they submit their drug application, they are assured a very fast review. That review time has been accelerated even more this year as the UK deals with BREXIT and wants very much to remain at the forefront of drug approvals. That is why it beat the U.S. to approval of the Pfizer BioNTech vaccine now in distribution here and in the UK.
While this is still not without risk, NWBO is now selling for $1.40 a share. There are just under 1 billion shares outstanding. This drug is applicable to all 15 solid tumor cancers. Think of a body part that gets cancer, and animal trials have shown it will work in all of them. This is a vaccine manufactured from your own dendritic cells so there is no toxicity to it. Northwest manufactures your own product and then flash-freezes it. If you have enough dendritic cells, they can sometimes make enough for years. The UK evaluates drugs on the basis of how many months you live for the cost to keep you alive. DC VAX costs a fraction of a year of Keytruda, which costs more than $400,000 per dose. Because it is not toxic and is made from your own cells, unlike with chemotherapy, your body is not in a race for the drug to kill your cancer before it kills you.
This cheap relative price of DCVAX-L is one of the principal reasons that Big Pharma has been so anxious to kill off NWBO and other small drug companies like it. The little guys don’t have the clout at the FDA, they don’t have giant staffs of people to undertake and complete trials, and they don’t have the fat checkbooks. That is why Northwest was forced to keep selling shares at $0.15 and $0.20 last year just to keep going, and it is why there are so many shares outstanding. Through sheer wiliness and determination, they have slogged on. At its current price, it is a perfect stocking stuffer for a loved one. It is not a widow or orphan stock, but the odds have started to tilt much more in our favor. That’s why I own it, and so do the clients of Gramercy Capital who have each made their own decision to do so because most of us have known someone who has been taken out by glioblastoma.
Joan Lappin CFA has been called an “investment guru” by Business Week and a “top manager” by the Wall Street Journal. The Sarasota resident founded Gramercy Capital Management, a registered investment adviser, in 1986. Email her at JLappincfa@gmail.com. Follow her on twitter: @joanlappin. Her past columns appear at heraldtribune.com/business/columns.